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EURGBP’s upside attempt, capped at 0.8775; retreats to 0.8740

November 11, 2022| Forex Market

  • The Euro finds sellers at 0.8775 and remains moving sideways.
  • UK economy contracts less than expected in Q3.
  • EURGBP: Still keeping the three-month forecast at 0.89 – Rabobank.

The Euro recovery attempt from Thursday’s lows at 0.8695 has been capped at 0.8775 in Friday’s early US session before retreating to 0.8740. From a wider perspective, the pair remains wavering. Between 0.8687, practically unchanged in the weekly chart

UK GDP data shows a softer-than-expected contraction in Q3

According to preliminary estimations, UK Gross Domestic Product contracted by 0.2% in the third quarter, well above the -0.5% market consensus after having grown 0.2% in the previous quarter. Year on year, the UK economy slowed down to 2.4% from 4.4%, also improving expectations of a 2.1% reading.

These figures confirm the forecasts of the Bank of England anticipating a is entering a lengthy recession ahead. The market, however, has shown a certain relief which has reflected in a moderate appreciation of the British Pound.

EURGBP: Still keeping the three-month forecast at 0.89 – Rabobank

Looking forward, analysts at Rabobank maintain a positive outlook on the pair: Over the coming weeks, we would expect GBP investors to be focused on the impact of the November 17 Autumn Statement, the ability of PM Sunak to hold the Tory party together, the outlook for UK growth/recession and BoE interest rates (…) We would expect issues surrounding the protocol only to have a clear impact on GBP as any related deadlines approach.  We are yet to be persuaded to alter our bearish view on the pound and maintain a 3-month forecast of EUR/GBP 0.89.”

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